Patents, profits, and AIDS care

ByA Christian Science Monitor RoundupFebruary 28, 2001

One day last October, South African AIDS activist Zackie Achmat arrived in Thailand on a flight from Johannesburg, drove to a pharmaceutical laboratory, and handed over $1,200. In return, he was given 5,000 purple-and-white capsules of a medicine that would have cost $51,500 at home.

Mr. Achmat broke the law when he brought the medicine back with him. The American drug giant Pfizer holds a patent on the medicine Achmat carried in his overnight bag - Fluconazole, used to combat AIDS-related diseases. And the cheap substitute was a generic copycat.

"But people were dying across the country and doctors were saying they could not afford to prescribe the right medicines," Achmat recalls. "We wanted to set a moral example, and put the right to life and health before profit. We don't want to be smugglers - this is the government's job to do."

The South African government cannot do it because Pfizer and other pharmaceutical companies will not let it. In a landmark lawsuit that could set a global precedent, 42 pharmaceutical firms challenged a 1997 law that allowed health authorities to bypass drug patents and import cheaper generic medicines, so the government agreed not to use it until the courts ruled.

In a country where 400,000 people have died of AIDS-related illnesses since 1997 and hundreds of thousands more are predicted to share their fate, activists say that drug companies must relax their patent rights.

In the glare of international campaigns for cheaper medicine, the big pharmaceutical companies are now scrambling to cut the prices they charge in African countries for HIV/AIDS drugs. But they insist that without patent protection, and the profits that come with it, they would have no incentive to spend millions of dollars on inventing new and more-effective cures.

"Patent protection is fundamental to continued research and development in these areas," says Phil Thomson, spokesman for GlaxoSmithKline (GSK), one of the biggest drug companies in the world. "We have to aim to protect our patents across the developing world."

In the face of the worst plague to face humanity since the Middle Ages (the HIV/AIDS epidemic in Africa has already killed 17 million people), that aim is increasingly controversial. Retroviral medicines have been shown to lower the fatality rate of patients diagnosed with AIDS, but only rich patients in rich countries can generally afford them.

'Wealth vs. health' campaign

Oxfam, the British-based development agency, this month launched a worldwide campaign to cut the cost of anti-AIDS drugs and other expensive medicines that treat diseases common to developing nations, accusing pharmaceutical companies and rich-country governments of waging "an undeclared drugs war against the world's poorest countries."

"The balance has skewed too far towards corporate wealth rather than public health," said Oxfam's director of policy, Justin Forsyth, as he launched the campaign.

Feeding the controversy is an Indian firm, Cipla, which has just signed a deal to sell its generic anti-AIDS cocktail to the Nobel prize-winning group Medecins Sans Frontieres for use in Africa. The patented cocktail costs between $10,000 and $15,000 for a year's treatment. Cipla has offered its substitute at cost: $350 a year.

A Kenyan orphanage last week took up Cipla's offer. "Enough is finally enough," said Chris Ouma, a doctor who works with AIDS patients in Nairobi. "We are beginning to wonder who is more deadly to the people of sub-Saharan Africa. Is it HIV or the businessmen who have their briefcases full of patent applications?"

India does not recognize pharmaceutical patents, so Cipla's production line is legal. But the Bombay company's efforts to export its medicine have run into trouble. A deal to sell cheap retrovirals to Uganda and Ghana, for example, fell through last year when Glaxo Wellcome warned Cipla that it was violating patent rights. The threats angered Amar Lulla, Cipla's joint managing director. "This is not a normal commercial situation where we talk about commerce and patents," he says. "In Africa ... they're talking about a whole generation being wiped out. Something has to be done."

What has to be done, doctors, AIDS campaigners, and drug companies agree, includes a range of measures from AIDS education and prevention to strengthening fragile health systems. But lowering the price of medicines is one part of the strategy.

And there is nothing like competition to bring prices down. In Brazil, for example, Merck is currently negotiating a discounted price for its anti-AIDS drug Efavirenz, in the face of the government's threat to start manufacturing the drug itself. "We want to be able to provide Brazil with medicines at an affordable price," says Gregory Reaves, Merck spokesman. "We want to resolve this matter in discussions." GSK is taking a similar approach, announcing last week that it would expand its nine-month-old offer to sell cut-price retrovirals to African nongovernmental organizations, as well as to governments. "Faster progress is needed," said GSK chief executive Jean-Pierre Garnier at a press conference last week in London.

By the summer, says GSK spokesman Mr. Thomson, the company will go further, after a review of its pricing policy for all drugs in the third world.

So far, GSK's Accelerated Access program for cheap AIDS drugs has been slow to take off, with only three African countries signing up for limited quantities. Governments have complained that negotiations with GSK have been lengthy and complicated. Nor are these "islands of philanthropy" sufficient, argues Oxfam.

The campaigning group is pressing GSK and other pharmaceutical giants to do more, and is also warning that new international trade rules imposed by the World Trade Organization (WTO) could increase prices for essential drugs by as much as 300 percent in poor countries.

New rules in the WTO's Agreement on Trade Related Property Rights (TRIPS), being phased in until 2006, give drug companies 20 years of patent protection in all member states - a period that critics say is excessive.

The WTO rules do allow governments to override patents in cases of national emergency or extreme urgency, and to import or manufacture rival drugs. Brazil has invoked this rule to manufacture inexpensive anti-AIDS medicines. But what constitutes a "national emergency" is not defined in the TRIPS, and drug companies - backed by the US government - have taken a narrow view of when exceptions should be allowed.

At the request of the pharmaceutical industry, for example, Washington has filed a complaint with the WTO against Brazil for threatening to make drugs itself unless the patent holders start making them locally and cheaply within three years of filing a patent.

The United States has also formally threatened trade sanctions against the Dominican Republic, Thailand, and more than 15 other developing countries unless they abandon manufacturing, exporting, or purchasing generic copies of drugs that American firms have patented.

In Africa, Washington has been more lenient since former President Clinton signed an executive order in late 1999 promising not to pursue governments that legalize generic copies of anti-AIDS drugs. US trade officials have been reported as saying the Bush administration will not overturn this policy, despite lobbying by the pharmaceutical industry.

They are not likely to extend it, however, which means that Brazil - widely seen as a model of how to fight AIDS - is still under the gun.

The Brazilian government has combined prevention, education, patent-busting, and bulk buying to save hundreds of thousands of lives and hundreds of millions of dollars. Using generic medicines produced at the government-run Far-Manguinhos laboratory, Brazilian doctors have halved the country's death rate from AIDS-related diseases and cut the number of patients hospitalized with them by 80 percent.

A coordinated effort needed

Brazil has offered to share its expertise with other countries. Officials from South Africa and Benin have already visited the Far-Manguinhos facility, and only a lack of political will and organization is stopping other countries from doing the same, says Paolo Teixeira, coordinator of Brazil's anti-AIDS program. "You need to have the government, congress, and society fighting for the same thing," says Dr. Teixeira. "That is what happened in Brazil."

Bringing drug prices down dramatically is not the whole answer to illness in the third world; nor, in some cases, is it even part of the answer. Retroviral medicines costing even $600 a year - 1/20th of their patented rivals' price - are still beyond the reach of many millions of the poorest AIDS sufferers.

In New Delhi, in the bustling AIDS ward at the All India Institute for Medical Sciences, doctors say only well-to-do patients can afford the full treatment. "The middle-class persons, the drivers, the maids, and the lower-middle-class persons, buy the drug a little at a time and often they stop taking it," says a junior doctor. "Most of the patients, they cannot afford the drug at all."

Even so, charging American or European prices in countries where many people live on barely $1 a day clearly does not make sense, say health officials. "The drug companies are increasingly making concessions to the fact that prices are a real issue," says Sophia Tickell, one of the leaders of Oxfam's campaign. "Very, very hardheaded patent enforcement is going to soften."